A fraudster impersonating either a company executive or an outside vendor communicates a request for funds, usually by email, to an employee with the authority or ability to perform the transaction. Too often, the employee falls for the scheme, fails to verify the request and the money is long gone by the time the company discovers that it has been defrauded. In Medidata Solutions v. Federal Insurance, an insurance dispute over loss incurred due to a payment instruction fraud, the Southern District of New York ruled in favor of the insured. In this article, partner Howard B. Epstein and special counsel Theodore A. Keyes discuss the impact of the decision on the insurance industry.